The EU Council adopted its first-reading position on 3 May 2026 on a legislative proposal to reform the Bank Recovery and Resolution Directive (BRRD) and the Procurement Directive, aiming to strengthen financial stability by improving early intervention, resolution conditions, and funding mechanisms. The reform will impact EU banks, resolution authorities, and taxpayers by enhancing the framework for managing bank failures.
Document details
The position was adopted by the Council (Economic and Financial Affairs) on 3 May 2026. The document is a first-reading position, meaning it sets the Council's stance ahead of negotiations with the European Parliament. The proposal is legislative and mandatory for EU member states once adopted.
Policy orientations and trade-offs
The reform focuses on tightening early intervention powers for resolution authorities, clarifying conditions for triggering resolution, and ensuring adequate funding through industry-financed resolution funds. A key trade-off is between increasing regulatory oversight to prevent systemic crises (financial stability) and imposing additional compliance costs on banks (business competitiveness). The proposal also seeks to streamline procurement of valuation services, balancing efficiency with transparency.
Impact on stakeholders
- EU banks: Will face stricter requirements for resolution planning and funding, increasing operational costs but potentially reducing the risk of disorderly failure.
- National resolution authorities: Gain clearer powers and tools for early intervention, enhancing their ability to manage crises.
- EU taxpayers: Benefit from reduced likelihood of bailouts, as the reform promotes industry-funded resolution.
- Valuation service providers: May see new procurement rules under the amended Procurement Directive, affecting market access.
Institutional follow-up
The Council's position will now be transmitted to the European Parliament for its first reading. Trilogue negotiations are expected to begin in the coming months, with the aim of reaching a final agreement before the end of the legislative term.